Labour markets across OECD countries continue to demonstrate resilience, with employment reaching a record 670 million people in May 2026 and expected to grow by 0.3% in 2026 and 0.6% in 2027. The OECD unemployment rate stood at 4.9% in May and is forecast to remain close to this historic low over the next two years.

Despite robust employment, workers' purchasing power remains under strain. Real wages are still below pre-pandemic levels in about one-third of OECD member countries, while higher energy prices are expected to intensify inflationary pressures, slowing wage growth further. Minimum wage increases have helped protect the earnings of lower-paid workers more effectively than those of the broader workforce.

OECD Secretary-General Mathias Cormann stressed that improving labour productivity through better education, lifelong learning, technological adoption and enhanced job mobility is essential to support sustainable wage growth.

The report also highlights emerging concerns for younger workers, with unemployment rising among both graduates and non-graduates in several countries. While artificial intelligence has had only a limited impact on youth employment so far, broader economic conditions and evolving skill requirements remain the primary factors affecting job prospects.

Significant regional disparities continue to shape labour market outcomes. In the weakest-performing regions, unemployment rates are more than twice those of the strongest-performing areas, with even wider gaps in countries such as Belgium, Canada, Italy and the Slovak Republic. Lower-income regions also offer fewer opportunities for income mobility.

To address these challenges, the OECD recommends greater investment in transport, housing, childcare, digital infrastructure, education and healthcare, alongside targeted employment, skills and industrial policies. Strengthening local partnerships, supporting displaced workers through retraining and income assistance, and promoting economic diversification can help regions adapt to structural changes while creating quality employment opportunities closer to where people live.